Customer Acquisition Cost (CAC) is the total cost a business spends to acquire a new customer. This includes marketing expenses, sales team salaries, advertising costs, software tools, and any other resources used to attract and convert prospects.

Understanding your CAC is essential for measuring the efficiency and profitability of your customer acquisition efforts. If your CAC is too high compared to the revenue generated by each customer, it may be time to refine your strategy. A healthy balance between CAC and Customer Lifetime Value (CLV) is key to sustainable growth.